Budget 2019: Solar industry reaction

Solar industry representatives have welcomed a union budget which promises new opportunities for electric vehicles and energy storage as well as investment in railways.

Expressing happiness renewable energy appears to be a priority in the government’s vision, Waaree Energies director Sunil Rathi told pv magazine: “We are elated at renewable energy being a key dimension in the government’s vision for the coming decade, as proposed in the interim budget, with specific focus on electric vehicles and energy storage solutions. With the focus on supporting domestic trade and services, and public sector undertakings now sourcing from local entities, we foresee an impetus towards growth for domestic manufacturers in the sector, while achieving economies of scale and supporting job creation.

“We see solar energy as an integral support pillar to the Pradhan Mantri Saubhagya Yojna, which aims at making electricity accessible to all. We applaud the government’s 2030 vision of reduced dependencies on foreign entities for fossil fuel, and believe that given a sustainable ecosystem for domestic solar manufacturers, solar energy will be a prime source of energy. This in turn will reduce imports, thus strengthening the rupee denomination and contributing to the nation’s gross domestic product.

Was solar a no-show?

“Furthermore, the proposed investment in the railways and roadways segments will enhance the scope for interstate commercial transportation, thus providing the solar industry with an opportunity to solarise commercial vehicles and other modes of public transport, like buses and trains. With technological evolution leading the sustainable efforts of the country, we are confident that, if implemented, the proposed vision will help attain energy security and generate employment.”

Gagan Vermani, CEO and founder of MYSUN, however, felt “for the second year in a row, solar was a no-show at the 2019 interim union budget, apart from a sole mention about the installed solar generation capacity addition in the last five years”.

The rooftop solar company boss added: “While prices for solar have continued to drop over the last year, it’s the lack of financing for solar projects that have hit the industry hard. And this year’s budget has missed addressing that yet again. We have been demanding solar loans to be treated like home loans, as an instrument for individuals to claim a tax rebate. But it seems like the industry will have to wait for that.”

The only silver lining, said Vermani, was that “there is some indirect relief to MSME [micro, small and medium enterprises] units registered with the GST [goods and services tax], in the form of a 2% interest rebate on fresh or incremental loans up to a limit of Rs1 crore. This may incentivize some of these MSMEs to utilize this facility to install solar systems on their rooftops and thereby reduce their energy bills.”

Elections are a factor

Nishant Jain, associate consultant at developer Gensol, also felt the budget failed to cater to the needs of the renewable energy sector, as no subsidies and incentives were announced.

“Already the renewable sector, especially solar, is going through many up and downs, which creates the scarcity of financing options,” he said, adding: “Promoting electric vehicle and energy storage would lead us to a sustainable and better future.”

Vinay Rustagi, managing director of consultancy Bridge To India, summed up by saying: “We were not expecting much other than possibly allocation of some funds for KUSUM [the Kisan Urja Suraksha Evam Utthaan Mahaabhiyan solar farming program], particularly given that elections are around the corner. Overall, it is disappointing for the sector, but we said at the beginning of the year that we are going to see little government initiative this year.”